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Renegotiation or repurchase of credit by another bank?

At a time when interest rates are historically low, it is worth considering renegotiating your mortgage with your bank. And if the latter refuses or its new proposal is not satisfactory, why not buy it out by a competing establishment? Discover the different stages of such an operation.

Renegotiation or repurchase of its credit by a competing bank?

Does your mortgage, taken out at a fixed rate, not benefit from the fall in interest rates? Ask for its renegotiation with your bank, to lower your monthly payments and the total cost of this loan.

Either she accepts to go back on the initial conditions of the loan and writes a new proposal, pushed by the competition of the sector and by the quest for its own objectives (search for new customers and conservation of old).

Either she refuses or establishes an unattractive offer, in which case you will have to opt for the repurchase of credit by another bank.

Be careful to consider the costs inherent in these operations: during a renegotiation, there are no early repayment indemnities and guarantee costs, or, if necessary, mortgage costs. Only the administrative costs remain.

Can I change loan insurance?

If the change of loan insurance is not authorized during a renegotiation, it is particularly recommended, during a repurchase of credit, since these said insurances can represent up to 20% of the total cost of the loan.

Note that bank insurance does not take into account your profile (age, lifestyle). However, for young audiences, opting for insurance delegation can lower the rate to 0.14%, while the “house” solutions are around 0.40%. Without the banks being able to refuse the subscription to external insurance.

How does the credit buy-back work?

What is the main owed?

The capital remaining due represents the amount not reimbursed at any given time. The majority of banking establishments build their offer on the basis of the amount shown on the date of the current month + 2 months. Indeed, it takes about two months to complete a home loan repurchase file, the time to analyze the request, make a new proposal and release the funds.

Who is responsible for notifying my old bank?

Before opting for the repurchase of credit, you will be brought to contact various organizations, whose proposals you will present to your historical bank so that it can issue a counter offer. If this does not suit you, you will notify them of your choice to turn to the solution of a buyout by another organization.

How will the balance of my loan be repaid?

As soon as the offer is accepted, after the legal reflection period of 14 days, the new bank will reimburse the balance of your previous loan. Note that if the new proposal is accompanied by a cash credit, its amount will be paid at the same time to the borrower’s current account.

The repurchase of mortgage is traditionally more interesting than a simple renegotiation: the offer of the new bank proving very often more competitive than the counter-offer of the historic establishment. However, the obligations associated with the buyout are much heavier (domiciliation of income, direct debit, administrative procedures, etc.) whereas renegotiation is a profitable and more flexible process. The decision then depends on the effort made by the borrower to achieve these savings.